China's Central Bank Crackdown Jolts Hong Kong Crypto Market

Hong Kong-listed cryptocurrency-related stocks declined sharply as China's central bank intensified its regulatory stance on virtual currencies and stablecoins. This follows the PBOC's warning against crypto speculation and stablecoins' inadequate compliance measures, affecting major firms like Yunfeng Financial Group and Bright Smart Securities.

Hong Kong-listed stocks with ties to the cryptocurrency sector experienced a significant drop on Monday, triggered by a stern warning from China's central bank regarding virtual currencies. The People's Bank of China (PBOC) highlighted its concerns about stablecoins, vowing to tighten regulations around these digital assets.

This stance has eliminated any previous uncertainty around China's policy on stablecoins, as stated by Liu Honglin, founder of Man Kun Law Firm. With regulators drawing a clear boundary, shares in Yunfeng Financial Group plunged over 10%, marking a potential two-month low.

Other firms like Bright Smart Securities and Commodities Group, along with OSL Group, also faced losses. These declines came after the PBOC criticized stablecoins for inadequate customer identification and anti-money-laundering controls, prompting Chinese businesses like Alibaba-backed Ant Group to halt stablecoin issuance plans.

(With inputs from agencies.)